Speculation is growing that Rishi Sunak will announce changes to Universal Credit in Wednesday’s Budget.
The Chancellor has reportedly accepted demands to cut the taper rate – the amount of Universal Credit withdrawn for every pound – from 63p to 60p.
Sunak is reported to have accepted the idea, which would mean up to 2.3 million working benefit claimants would keep 40p – rather than 37p – of every extra pound they earn through work.
Allied with a 59p rise in minimum wage, the changes come close to making up for this month’s cut to the £20-a-week Universal Credit uplift.
One minister told The Sun: “The Chancellor wants to incentivise work, this makes sense.”
Another ex-Cabinet minister added: “Reform of the taper would be very sensible.
“The present situation penalises taking on more work, the opposite of what Universal Credit is supposed to do.”
The Joseph Rowntree Foundation said the move would benefit 1.7 million families – but still leave two million facing the full force of the cut.
Andy Burnham, the Greater Manchester metro mayor, revealed on Wednesday morning that he was expecting the government to U-turn on Universal Credit.
Speaking to the BBC, Burnham said: “On the rabbit out of the hat, I’m hearing that they are about to u-turn on Universal Credit.”
He added the move would be “a credit to the Labour Party”, which has campaigned for the £20 uplift to return, saying: “We’re hearing that there’s going to be a change, particularly for those on Universal Credit in work.
“If he’s going to do that, it’s the right thing to do. This pandemic is not over, people are still feeling its impact but credit to those who have campaigned particularly those on the Labour front bench who have been consistent on this point.”